In the first quarter of 2025, banks reclaimed ground across the automotive finance industry, signaling notable market share growth. According to Experian’s State of the Automotive Finance Market Report: Q1 2025, banks’ total market share increased to 26.55% during the quarter, from 24.79% in Q1 2024.
Meanwhile, captives’ market share declined “from 31.28% last year to 29.81% this quarter and credit unions experienced slight growth from 20.20% to 20.63% during the same time.”
Melinda Zabritski, Experian’s head of automotive financial insights:
“For the first time in years, we’re seeing banks expand market share and reassert their presence in a growing and competitive market. This shift counters many of the trends we observed in the post-pandemic era, where high interest rates and the re-emergence of new inventory allowed captives to push heavy incentives and capture significant market share.”
Although banks experienced growth in Q1 2025, “captives continue to hold the majority of market share for new vehicle financing at 57.08%; however, their market share declined from 62.07% a year ago.”
Banks increased from “20.37% in Q1 2024 to 24.13% in Q1 2025 and credit unions went from 9.62% to 10.89% year-over-year.”
Interestingly, banks have the most market share “for used financing at 28.37% this quarter, up from 27.88% last year.”
Credit unions followed closely “at 28.24%, from 27.71% and captives declined from 8.45% to 7.42%.”
Beyond some of the changes in lender market share, the Q1 2025 report found consumers “seem to be managing their monthly payments.”
In fact, 30-day delinquencies improved “during the quarter, declining to 1.95%, from 2.10% in Q1 2024, while 60-day delinquencies remained flat at 0.83% year-over-year.”
Digging into the new and used loan attributes, the report showed “modest increases.”
The average loan amount for a new vehicle “increased $1,110 from last year, reaching $41,720 in Q1 2025.”
Meanwhile, the average interest rate dropped “from 6.85% in Q1 2024 to 6.73% this quarter and the average monthly payment grew from $737 to $745.”
On the used side, the average loan amount “only increased $90 year-over-year to $26,144.”
The average interest rate declined from “12.36% last year to 11.87% this quarter and the average monthly payment came down $3 from Q1 2024, reaching $521 in Q1 2025.”
Zabritski continued:
“With many consumers receiving tax refunds and others exploring refinancing options, we observed some positive shifts in the automotive finance market. Lenders and dealers will want to keep a close eye on how these trends evolve over the coming months and years ahead and adjust go-to-market strategies accordingly.”
Additional findings for Q1 2025:
- New vehicles made up 43.29% of automotive financing in Q1 2025, up from 40.90% the previous year, while used vehicles made up the remaining 56.71%.
- New leasing experienced slight growth during the quarter, reaching 24.69%, up from 23.71%.
- Nearly 10% of all new vehicle transactions were EVs in Q1 2025, and nearly 60% of all EVs transactions were leases.
- The average payment difference between a new vehicle loan and lease was $142 this quarter.
